Study
| EST. READ TIME 2 MIN.Alberta’s deficit reduction takes longer and reduces spending less than previous reform-minded governments
What’s Changed, By How Much, and What Remains to be Done: An Analysis of Alberta’s Budget
Summary
- Since 2008/09, Alberta has run a nearly uninterrupted string of budget deficits. This bulletin analyzes the recently tabled 2019 Alberta budget to assess the extent to which it represents a change of course from the policy approach that has prevailed in in recent years.
- We find that with the 2019 budget, the trajectory of government spending and the strategy for deficit reduction do represent a change in policy direction. Whereas nominal program was previously growing every year, the new budget forecasts nominal spending reductions in the years ahead.
- Partly as a result of this change in approach, the government now forecasts that it will return to balance one year faster than under the pre-existing fiscal plan and accumulate less debt in the interim.
- However, from a historical perspective, the spending reductions planned in Budget 2019 are substantially lower than those introduced in the 1990s by the governments of Roy Romanow, Jean Chretien, and Ralph Klein.
- The four-year time horizon to budget balance does contain risks; historically, successful efforts to eliminate large deficits in Canada have taken place over two or three years. Further, Budget 2019 does not go very far in restoring Alberta’s tax competitiveness, and though the province plans to reduce its reliance on resource revenue, the 2019 budget is only a first step in getting the province off the resource revenue “rollercoaster.”
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Steve Lafleur
Steve Lafleur is a research director at the Institute for Research on Public Policy, a former senior fellow of theFraser Institute and a former senior policy analyst at the Fraser Institute. He holds an M.A. in Political Science from Wilfrid Laurier University and a B.A. from Laurentian University where he studied Political Science and Economics. He was previously a Senior Policy Analyst with the Frontier Centre for Public Policy in Winnipeg and is a Contributing Editor to New Geography. His past work has focused primarily on housing, transportation, local government and inter-governmental fiscal relations. His current focus is on economic competitiveness of jurisdictions in the Prairie provinces. His writing has appeared in every major national and regional Canadian newspaper and his work has been cited by many sources including the Partnership for a New American Economy and the Reason Foundation.… Read more Read Less… -
Ben Eisen
Senior Fellow, Fraser Institute
Ben Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at theFraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy. He has been widely quoted in major newspapers including the National Post, Chronicle Herald, Winnipeg Free Press and Calgary Herald.… Read more Read Less… -
Milagros Palacios
Director, Addington Centre for Measurement, Fraser InstituteMilagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more Read Less…
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